Foreign Outflows Drag Indian Markets, Earnings Signal Buying Opportunities

Indian equity markets ⁣ continue to struggle for direction as foreign‌ investor outflows dominate sentiment, even though underlying corporate performance does not appear as weak as market moves suggest. According to market expert Sandip Sabharwal, the current phase is being driven more by ⁣momentum-based global asset reallocation than by ‌deteriorating fundamentals.

“Most active foreign investor funds ‍are reallocating out of ​India. Money is going into many other markets—Korea, Hong Kong, Brazil—so many markets are getting money, ‍but India is ​seeing outflows,” Sabharwal said in a conversation with ET Now. He added that this trend-driven movement could persist for some time, even though company-level data tells a different story.

Sabharwal pointed out that recent earnings from several sectors ⁣indicate stability and even improvement. Banking results from Axis Bank and Kotak ​Mahindra Bank suggest a pickup in credit growth, while asset quality remains ‍strong. UltraTech⁢ Cement reported robust third-quarter volumes, growing faster than the industry, with overall cement demand rising 9–10%, a notably healthy figure. On the consumption front, Godrej Consumer Products has also ⁣indicated a revival in demand.

“I do not think things are as negative as what the market⁣ screen or ⁤the numbers on the market are reflecting,” ⁣he‍ said.